Weekend:

USD/JPY traded a little higher early in the session. We had machine order data from Japan that put a very minor wobble into expectations of a Bank of Japan tightening in policy tomorrow, along with the announcement of an unscheduled JGB buying operation to take place on Tuesday through Thursday. After hitting a high just over 149.30 USD/JPY subsequently has dribbled back to around 149.00 to be barely changed on the session. Expectations of a Bank of Japan pivot away from negative rates and yield curve control continued to build. In the points above, for example, you’ll find Nomura calling the BOJ tightening a ‘done deal’ and Goldman Sachs shifting their expectation for the pivot to tomorrow from previously forecasting an April move.

Despite iron ore hitting its lowest level since May 2023, under $100, AUD/USD gained a few tics higher. Its managed to sustain the small positive on the session, helped along by data from China today for key indicators from China; business investment, retail sales, industrial production and unemployment showing what some are referring to as continued ‘green shoots’ for the economy. Business investment, retail sales, and industrial production all beat expectations. Unemployment, however, rose.

Oil opened with a small gap to the downside but that has closed. As a side note, Morgan Stanley raised their Q3 Brent crude forecast to $90 / barrel, from $80.

In geopolitics we had another missile test firing from North Korea, along with prolonged comments from Putin, who won his sham election for another six year term. In his remarks Putin warned that a full-scale conflict between Russia and NATO is possible if Western troops enter the fighting:

  • 'Anything is possible in today's world. It is clear to everyone that this would be one step from a full-scale world war three'
usdyen wrap chart 18 March 2024 2